USMCA renewal stalls as U.S. seeks 82% content rule, pressuring GM, Ford and Stellantis stocks amid tariff uncertainty and shifting valuations.
General Motors, Ford and Stellantis face a fresh round of trade uncertainty after the Trump administration declined to renew the U.S. Mexico Canada Agreement, a decision that starts a 10 year countdown of annual reviews and keeps tariff rules for North American built vehicles in limbo.
Key Takeaways
- The USMCA now enters annual reviews rather than automatic renewal, with a possible extension to 2042 or expiration in 2036.
- Any member country can exit the pact with six months written notice.
- Washington wants to raise the regional parts content requirement from 75 percent to 82 percent, plus a new rule requiring 50 percent U.S. sourced parts.
- Compliant vehicles currently face a 27.5 percent tariff on the value of non U.S. content; non compliant parts face a 25 percent tariff.
- The next round of talks is scheduled for July 20 in Mexico City.
General Motors: Valuation, Momentum and Yield Amid Trade Uncertainty
GM shares have been trading in a wide band as investors weigh the automaker's exposure to shifting Rules of Origin standards. The stock's market capitalization sits in the tens of billions, and its price to earnings ratio remains well below the broader market average, reflecting persistent skepticism about margins in a tariff heavy environment. Earnings per share have held up thanks to strong truck and SUV demand, but the stock's 52 week range shows just how sensitive shares are to tariff headlines, swinging between lows tied to trade fears and highs when relief seemed possible. Momentum readings on the relative strength index have oscillated near neutral territory, a sign traders are undecided rather than convinced of a clear direction. The dividend yield continues to offer income seekers a reason to stay patient, even as the stock's price action stays choppy. A bull case rests on GM's heavy North American manufacturing footprint, which could position it well if the 82 percent domestic content threshold becomes the new standard. A bear case points to the added 50 percent U.S. specific parts rule, which could raise costs across supply chains that still rely on Mexican and Canadian suppliers for many components.
What the Rules of Origin Fight Means for Automakers
The current USMCA requires 75 percent of a vehicle's content to originate in the U.S., Mexico or Canada for preferential tariff treatment. The Trump administration wants that raised to 82 percent, according to a report from Automotive News, and wants half of all parts to come specifically from American suppliers. Vehicles that meet USMCA rules avoid the administration's 25 percent tariff on parts, but still face a 27.5 percent tariff on the value of any non U.S. content they contain.
The American Automotive Policy Council, representing Ford, GM and Stellantis, called for a durable resolution this week. The group noted that automakers building in North America face a competitive disadvantage against importers from countries paying a flat 15 percent tariff without comparable sourcing rules.
Ford and Stellantis Face Similar Pressures
Ford and Stellantis carry their own valuation stories shaped by the same trade backdrop. Both companies report earnings per share and dividend yields that draw income focused investors, while their price to earnings multiples remain compressed relative to historical norms, a pattern consistent with a sector pricing in policy risk rather than pure demand weakness. Their 52 week ranges reflect similar volatility to GM's, moving on tariff news as much as on quarterly results.
For all three companies, momentum indicators have lacked conviction. RSI readings hovering near the midpoint suggest neither strong buying nor selling pressure has taken hold, leaving shares to trade largely on headlines out of Washington and Mexico City rather than fundamentals alone.
Where Do Automakers Stand Ahead of the Next Round of Talks
The next negotiating session, set for July 20 in Mexico City, will test whether the 82 percent threshold and the new domestic parts requirement gain traction or get watered down. Until there is clarity, GM, Ford and Stellantis shares are likely to keep reacting to trade developments as much as to production numbers or sales figures, with valuation, momentum and yield metrics reflecting a market still waiting for certainty.
